Bill
HB 8401
Rhode Island will require all medical malpractice coverage—including self-insurance, captives, and pools—to be regulated by DBR and tied to licensure, with solvency, governance, an
Title: AN ACT RELATING TO INSURANCE -- UNAUTHORIZED INSURANCE BUSINESS -- MEDICAL MALPRACTICE INSURANCE
Introduced: April 3, 2026
Sponsors: Representatives Spears, Cotter, Boylan, Fogarty, Donovan, Speakman, McEntee; Co-sponsors include Susan Donovan, Tina Spears, Jennifer Boylan, Megan Cotter, Kathleen Fogarty, Carol McEntee, June Speakman
Committee: House Corporations
Effective date: January 1, 2027
Purpose and overall intent
- Strengthen oversight and regulation of medical malpractice coverage in Rhode Island, including self-insurance arrangements, captive structures, risk pools, and other forms of malpractice coverage.
- Ensure that all forms of malpractice coverage for Rhode Island licensed providers are regulated by the Rhode Island Department of Business Regulation (DBR) and meet solvency, governance, and reporting standards.
- Link malpractice coverage status to licensure and facility licensing processes to improve transparency and financial soundness.
Key provisions and changes
1) Hospitals affiliated with accredited medical schools – self-insurance for malpractice
- Hospitals affiliated with accredited Rhode Island medical schools may establish self-insurance programs for medical malpractice liability.
- Such programs require full regulatory oversight and approval by the DBR.
- The hospital must establish and maintain a reserve fund (which may be part of or separate from an existing self-insurance fund) for malpractice coverage.
- Self-insurance funds must provide annual certified financial statements with actuarial projections to the Director of the DBR and the Director of the Department of Health (DOH).
- Coverage amounts must meet minimum insurance coverage limits set by DBR regulations.
- The DBR must approve the formation and operation of the self-insurance program and may require demonstration of:
- An insured entity (e.g., a captive insurer) regulated as an insurance entity
- Actuarial soundness
- Adequate capitalization and reserves
- Claims-paying ability under adverse conditions
- Ongoing financial reporting and independent audits
- The self-insurance reserves would survive hospital bankruptcy, dissolution, or reorganization
- DBR can examine, audit, and take corrective action (including suspending or revoking approval) similar to DBR’s authority over licensed insurers.
- If the self-insured entity is domiciled outside Rhode Island, the DBR may access records from the foreign jurisdiction.
- Hospitals must cover DBR costs related to regulation; hospital information provided to DBR is subject to confidentiality rules, with some information being public.
- Self-insured status does not exempt entities from solvency, reporting, or oversight requirements.
- Medical malpractice coverage under this framework must be approved by the DBR to count toward licensure recognition.
- DBR may withdrawal approval if the entity is in hazardous financial condition or noncompliant.
- Annual permission renewal is required; DBR will prescribe the application process.
- Public posting: general description of the self-insured entity and contact information shall be public; other information remains protected under existing confidentiality provisions.
2) Comprehensive regulation of medical malpractice coverage (new DBR Section 27-16-2.7)
- All forms of medical malpractice coverage (including insurance policies, self-insurance programs, captives, and risk-sharing pools) for Rhode Island licensed providers fall under DBR’s exclusive regulatory authority.
- Coverage must be approved by the DBR as a prerequisite for licensure.
- DBR must establish and enforce standards for:
- Financial solvency
- Reserve adequacy
- Claims-paying ability
- Governance and risk management
- DBR has authority to examine, audit, and enforce compliance for all entities providing such coverage.
- Any malpractice coverage must meet limits and deductibles specified by DBR rules to be valid for licensure purposes.
- Public disclosure: the identity of the coverage, including insurer or self-insured entity, policy limits, and deductibles, must be available to the public on demand.
3) Reporting requirements and coordination with other agencies (DBR and DOH)
- Amends reporting requirements to DOH and the Rhode Island Board of Medical Licensure and Discipline, and, where applicable, the Board of Examiners in Dentistry.
- Insurers or self-insured providers must report claims, settlements, judgments, and arbitration awards within 30 days of notice.
- Annual reporting to the Commissioner of Insurance is required, with detailed data on insured counts, premiums, claims, settlements, and lawsuits by rating class.
- Insurers and self-insured entities must provide financial and actuarial data to DBR; DBR may request additional reporting to assess solvency.
- DBR coordination with the Department of Health and with other jurisdictions is required; material solvency issues or regulatory actions must be communicated to DOH and may trigger licensure action or other regulatory responses.
- Hospital license transfers must consider malpractice coverage status; failure to maintain required coverage can be grounds for license denial, suspension, or revocation.
4) Licensure and facility licensing integration
- Licensure-related sections require facilities to maintain approved malpractice coverage (via DBR-reviewed forms) as a condition of licensure.
- If a facility fails to maintain compliance with malpractice coverage requirements, licensure actions may be taken.
5) Effective date
- The act takes effect January 1, 2027.
Who is affected
- Hospitals affiliated with accredited medical schools in Rhode Island (with potential self-insurance programs)
- Hospitals, physicians, and other licensed healthcare providers and facilities that obtain malpractice coverage (through insurance, self-insurance, captive structures, or risk-sharing pools)
- Self-insurance entities and captive insurers providing medical malpractice coverage
- The Department of Business Regulation (DBR) as the primary regulator
- The Department of Health (DOH) and boards overseeing licensure (e.g., Board of Medical Licensure and Discipline, Board of Examiners in Dentistry)
Projected impact
- Strengthened DBR oversight of all medical malpractice coverage forms
- Enhanced financial solvency and governance standards for malpractice coverage
- Greater transparency regarding coverage limits, deductibles, and responsible parties
- Tie-in with licensure and hospital licensing processes to ensure ongoing compliance
- Potential shift in compliance burden and regulatory costs for self-insured hospital programs and for entities providing malpractice coverage
Notes
- The bill explicitly clarifies that self-insured arrangements are subject to DBR approval and ongoing regulation, and it broadens DBR’s authority over all forms of malpractice coverage.
- Takes effect January 1, 2027, allowing time for regulatory rulemaking and implementation.
Compiled from official sources — confirm details with the bill’s official record.
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